Tuesday, February 20, 2018

100% reimbursement of State GST to airlines setting up global hub in Nagpur

Maharashtra Government, which is the first State in the country to have in place its own Aerospace and Defence Manufacturing Policy, is offering sops to attract various airlines to Nagpur, which is fast coming up as an aviation and aerospace hub. Among the sops are 50 per cent reimbursement of Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) and 100 per cent reimbursement of State Goods and Service Tax (GST) on service parts.

The detailed policy document that was released on February 14 emphasises on promoting maintenance-repair-overhaul (MRO) base at Nagpur. To promote Nagpur as a ‘Global Hub’, any airline that sets up its global hub at Nagpur and utilises its MRO facilities will be provided with 50 per cent reimbursement of VAT on ATF and 100 per cent reimbursement of State GST on service parts. Nagpur has been chosen because of its strategic location and existing MRO facility. The incentives are being offered to make Nagpur not only a ‘Global Hub’ but also a preferred choice for low-cost carriers.

The Government also aims at establishing ‘Defence Hub’ in Nagpur. Besides, similar ‘Defence Hubs’ are proposed to be established in Pune, Ahmednagar, Nashik, and Aurangabad.
The policy adopts a cluster development approach. The Government has identified clusters for the purpose.

A cluster is led by one or more anchor units and supported by multiple micro, small, and medium enterprises. The Government treats this approach as key to growth of any sector. Keeping this in mind, the Government has identified Nagpur, Nashik, Pune, and Mumbai as clusters with great potential. Nagpur’s potential as aerospace hub is growing with availability of facilities including a well-equipped MRO, Nashik has presence of Hindustan Aeronautics Limited, Pune has industrial units producing defence components, and Mumbai has several vital installations including Mazagaon Dock which is prime shipyard of the country for manufacturing warships and submarines.

Under the policy, the Government is offering incentives to the units manufacturing defence or aerospace products/equipments/contraptions as Original Equipment Manufacturer (OEM) and supplying them to defence establishments, armed forces (Army, Navy, Air Force and others), para-military forces, provincial forces of the Government of India or State Governments or to other countries/State-sponsored organisations by way of exports through approved official channels of supply.
20/02/18 The Hitavada